Tag: mergers and acquisitions

Quabit Finalises Sale of Rayet Construcción for €14.3 Million

9 October 2019 – Quabit has finalised its acquisition of 82.9% of the share capital of Rayet Construcción, a construction company controlled by Félix Abánades, for 14.3 million euros. Quabit is thought to be taking control of the construction in response to tight demand and to guarantee the construction and delivery of its homes.

The president of Rayet, Félix Abánades, will thereby raise his stake in Quabit from 19.1% to 20.3%, as part of the payment will be made with shares in the developer. The rest of the payment will be made in cash.

Original Story: Valencia Plaza

Photo: Eva Máñez

Adaptation/Translation: Richard D. K. Turner

Vitruvio Invests €16.5 Million in Three Buildings in Central Madrid

9 October 2019 – The firm Vitruvio announced that it had acquired 35% of Fidelges S.L. for €6 million. Also, the company stated that it would propose a merger by absorption with the latter firm. The deal, valued at a total of 16.5 million euros, will allow Vitruvio to acquire three properties in central Madrid at an average cost per square meter of €2,700.

The three properties are located in prime areas of Madrid, at Calle Duque de Rivas 4, Calle Aguirre 1 and Calle Tribulete 23. The buildings will undergo an investment of €4.5 million in upgrades and renovations to convert them into residential developments.

Original Story: Idealista

Adaptation/Translation: Richard D. K. Turner

WeWork Acquires Spacious Coworking Startup

2 September 2019

WeWork acquired Spacious, a competing start-up that turns restaurants that are empty during the daytime into coworking spaces. The two firms declined to reveal details of the transaction.

Spacious was created in 2016 to maximise the profitability of under-utilised urban spaces such unoccupied commercial premises and restaurants. Users can use the spaces as office space, paying 18.10 euros per day or 116.50 euros per month.

Original Story: Eje Prime

Adaptation/Translation: Richard D. K. Turner

Silicius Adds Bahía Plaza Shopping Centre to Portfolio in Non-Monetary Capital Increase

28 July 2019 – Richard D. K. Turner

The socimi Silicius, managed by Mazabi, has finalised a third capital increase of more than 20 million euros through the addition of the Bahía Plaza Shopping Center (Los Barrios, Cádiz) to its asset portfolio of assets. The shopping centres previous owners joined Silicius as new shareholders.

The centre, which has a gross leasable area of 19,190 m2, has an occupancy rate of 98%. Its current tenants include Burger King, Foster’s Hollywood , La Tagliatella, 100 Montaditos and Odeon.

Original Story: Idealista

MVGM Acquires JLL’s European Operations

3 July 2019 – Richard D. K. Turner

The Dutch real estate management group MVGM is acquiring the European property management operations of the American real estate services firm JLL. The deal will make the combined company one of the five largest European companies in the sector, with a presence in 10 countries.

After the deal, MVGM will have a presence in eight additional markets (Spain, Portugal, Belgium, Luxembourg, Poland, Czech Republic, Romania and Slovakia), while increasing its footprint in the Netherlands and Germany.

Original Story: Expansion

 

Cerberus & BBVA to Merge Divarian with Haya Real Estate

25 April 2019 – Europa Press

The Cerberus investment fund will merge Divarian, the company that it created with BBVA after buying the bank’s real estate assets, with its servicer, Haya Real Estate, the firm announced. The combined firm will manage the 60,000 most residential properties that the entity sold to the fund. Divarian and Haya’s management and real estate management operations will also merge.

Under the agreement, Haya will have a total of €49 billion of assets under management, consolidating its position as the largest servicer in Spain. Haya currently provides services to Sareb, BBVA, Bankia, Grupo Cajamar and Liberbank, as well as to several institutional funds.

Divarian is 80% controlled by Cerberus, while BBVA holds the rest.

Original Story: Europress Economia

Translation/Summary: Richard D. Turner

Cerberus Looking to Top Blackstone as the Largest US Investor in Spanish Real Estate

7 February 2019

Cerberus has a plan for Spain: the fund is looking for continued growth in the country. So, the US fund is putting together one of the most powerful teams in the Spanish real estate industry. Its goal in the medium term is to triple its investments in residential development, continue to grow its logistics business and start a new front in the rental business.

Cerberus has already invested more than 10 billion euros in Spain and now wants to exploit new lines of business such as rentals and logistics. The fund also has plans to leverage its development operations through the acquisition of more land and after buying Inmoglaciar. Blackstone, in total, has already invested more than 26 billion euros in Spain since 2014.

The American fund has generally avoided the limelight. In Spain, the fund has maintained a fairly low media profile, but that now seems about to change, as Gonzalo Gallego, who was responsible for the fund’s real estate investments in Spain, commented on Wednesday.

“We do not usually hold public events, and I think it’s a good time for a change. Cerberus has come to stay in Spain, we are 22 people dedicated to it, and it is already the second most important office in the world,” the representative said.

A look towards rentals

The change is also linked to the fund’s interest in expanding its investments in rentals. Mr Gallego stated that the sector is one of the pillars of the fund’s new strategy. Therefore, they have begun assembling a team dedicated exclusively to the sector.

Cerberus stated that the team consists of local experts who are seeking to “develop strategies that add value to their acquisitions.” The business will not be based solely on buying NPLs, though Mr Gallego stressed that the Spanish market has many such opportunities. “We invest in an asset by asset basis,” he said.

Another business the fund has experienced success with is REOs. Mr Gallego thinks that “they are wonderful.” “We know how to reposition and sell them to our investors; we work with almost 400 funds actively in the sale of these portfolios, it’s not a coincidence, it’s a strategy,” he explained.

Cerberus Real Estate believes that Spain still has enormous potential, although the current macro situation is forcing them to be more careful with their investments. “We are very optimistic regarding Spain, but some cold winds could freeze up some types of investments,” Mr Gallego said.

Opportunities and mergers

In the end, Cerberus believes that it has a ‘pipeline’ full of opportunities and that is why the fund is predicting an excellent year ahead, especially since there will be a “consolidation of the market” with “very important” corporate operations.

The North American fund came to Spain in the middle of the financial crisis (between 2010 and 2012) with the objective of taking over banks and real estate companies, as it did in other countries. The first did not go well after some attempts with the older banks (cajas). However, the fund’s luck with real estate has been better. Cerberus already controls more than €50 billion in assets, from Bankia, Sareb, Cajamar, Liberbank and BBVA.

Its next acquisition could be the developer Solvia Desarrollo Inmobiliario (SDIN) of Banco Sabadell, which is selling land worth more than 1 billion euros. The bid for these assets has already begun, and financial sources claim that the fund has shown interest in them.

Original Story: Vox Populi

Translation: Richard Turner

Spanish Hotels Change Hands As Tourism Booms

16 August 2018

Spain is a tourist country par excellence: beaches, sun, good weather and hotels. It is a country where tourists can find a comfortable place to spend their holidays, while at the same time, investors see an interesting potential for profits. In this manner are the parallel tales of the splendour of Spain’s tourism interwoven with the non-stop action in the local hotel sector real estate market.

Last year, investments reached 3.750 billion euros, according to real estate consultancy CBRE, a record figure that gives an idea of the market’s momentum. The frenetic pace of acquisitions didn’t stop for a rest this summer either, as the sector awaits the result of the Thai International’s takeover bid for NH Hoteles.

The hotel scene is undergoing a paradigm shift and the business model that has been used since the 1980s, where the property owner and hotel operator were the same, is moving towards a more Anglo-Saxon profile, where the owner is an investor, and lifelong hotel sector professionals are primarily responsible for management. The sector is still highly fragmented and dominated by individual owners and independent managers (55%), although their relative participation is decreasing. Funds, socimis and family offices have gained prominence in recent years and are responsible for most of the operations currently being executed, to the detriment of traditional groups. Consequently, 57% of the total invested in the year up to June corresponded to that group of investors, compared to 40% for the traditional hotel chains.

The reason for the change is, again, the bursting of the real estate bubble. Many hotel owners experienced difficulties and, in some cases, were unable to cope with their debts to banks, which in many cases took over the assets; then came the venture capital funds that, honouring their nickname – vultures –, took advantage of the situation to snap up those hotels at firesale prices. The funds then follow a familiar path after that, and the same story is repeated in other segments of the real estate market: the funds invest in the completion of moribund projects or to upgrade older assets, run the businesses at a good profit until they find an opportunity to unload their investment, obtaining attractive returns in the process.

“[The funds] obtain annual yields of around 6.5-7% and aim to achieve between 12% and 15% with an eventual sale of the asset,” says Bruno Hallé Boix, founding partner of the consultancy Magma Hospitality Consulting.

Divestment will be the next phase of the current cycle, but for now, market players are focusing on repositioning the businesses and their subsequent consolidation. Investment forecasts for 2018 are positive, although they are not expected to return to the highs of last year. In the first semester of this year, the total volume invested shrank by 55%, to 960 million euros. In that same period, 70 hotel assets were transacted, 8,500 rooms were built, together with another 1,800 in as yet incomplete buildings, lots and projects sold.

“It is becoming harder every day to find good assets, that’s why it’s a good time for skilled opportunity seekers,” Mr Hallé Boix stated.

Mergers and acquisitions

One of the most important transactions this year starred Blackstone, which has established itself as Spain’s hotel giant after finalising its takeover bid for Hispania. The US fund already owned more than a dozen assets stemming from a previous real estate transaction with Banco Santander and HI Partners. With its acquisition of Hispania, Blackstone added another 46 hotels and more than 13,100 rooms to its portfolio.

With that operation over, all eyes are now on NH Hoteles. The chain has been on the block for months after an unsuccessful attempted merger with Barceló, and so far, Minor International seems likely to take the prize. The Thai company, also planning on creating a hotel sector behemoth, is offering 6.4 euros per share the Spanish chain, which had a relatively cool reception.

While awaiting the outcome of this latest page-turner, almost no one is ruling out additional transactions in the coming months. 83% of Spanish and international chains surveyed for Magma Hospitality’s Hospitality Hotel Management 2018 study demonstrated an interest in moving ahead with possible mergers or acquisitions with other hotel groups in Spain during 2018 and beyond. At the same time, the growth of specialised socimis will continue to add dynamism to the sector.

For investors, including both socimis and the traditional operators, holiday resorts are seen as the next big bet, accounting for 78% of investments in the first half of the year, compared to the 22% that went to urban hotels. Baleares (27%), Canarias (26%) and Andalucía (9%) were the main targets of regional investment, with others such as Madrid (5%) and Barcelona (4%) following far behind, according to CBRE.

In 43% of the cases, the average sale price for the assets valued the hotels at between 60,000 and 120,000 euros per room, according to the report. At the same time, there was an increase in acquisitions where buyers paid more than €120,000/room, another example of the boom in the sector.

Original Story: El Mundo – María Hernández

Translation: Richard Turner

 

Aguirre Newman Closes 2017 With a Turnover of €40 million and a New Corporate Structure After Its Merger with Savills

28 March 2018

Aguirre Newman now has a single shareholder, Savills Overseas Holding Limited, and has changed its name to Savills Aguirre Newman, the group reported in the Business Registry.

Aguirre Newman bid farewell to its last year as an independent company. The firm recently merged into Savills under the name Savills Aguirre Newman, finishing 2017 with a turnover of 40 million euros, according to the British group’s annual report. Both companies, also just finalised, commercially, their merger after the absorption of Aguirre Newman by the Spanish subsidiary of Savills.

According to the Business Registry’s Official Gazette, Aguirre Newman now has a single shareholder, Savills Overseas Holding Limited, and changed its name to Savills Aguirre Newman. The company also appointed Santiago Aguirre and Satephen Newman as advisers, both founders of Aguirre Newman together with Mark Ridley, Borja Sierra and Rafael Merry del Val of Savills.

Aguirre Newman is beginning a new phase under Savills wing in Spain, bidding farewell to 2017, a year in which the group’s net turnover reached 40 million euros. According to the latest published data, the consultancy had gross revenues of 69 million euros in 2016.

In 2017, Savills, for its part, increased its profits by 19% to 91 million euros. The British group also achieved a global turnover of 1.8 billion euros, an increase of 11% over the previous year. Savills Investment Management, the group’s investment arm, increased its portfolio of real estate assets under management by 5%, to 16.536 billion euros at the end of 2017.

Rafael Merry del Val, CEO and Co-Chairman of Savills Aguirre Newman in Spain, during a presentation of the British group’s, stated that “the merger with Aguirre Newman places as in a new level of leadership in the local market.” The group’s goal for 2018 to “gain market share and attain growth from the beginning”, since, “with just over two months of partnership, we can already see the benefits of the merger.”

Savills Aguirre Newman, a new player in the sector

The British company reported to the London stock exchange on the last working day of last year that it had finally signed a purchase agreement with the Spanish real estate consultancy. The company had advised the LSE of its intention to acquire the company based in Madrid on July 28. Savills paid 67 million euros to take over the Aguirre Newman.

According to the purchase agreement, the British consultancy paid 42 million euros when the deal was finalised, and the rest will be paid in five million euros tranches over the next five years, reaching a total of the 25 million euros that had been agreed upon by both parties. Initially, Savills had planned to complete the purchase before November 30, but some administrative setbacks caused a brief delay.

The company, however, assured market sources that the deal would be finalised by the end of 2017. The British group reported the acquisition of the company on the last working day of the year. The need for both groups to sign their merger before the end of the year was also an administrative matter, since they wanted to conclude the transaction by the end of the year to begin operating as a single entity, Savills Aguirre Newman, in the new year.

The merger will lead to a significant number of changes to the combined group’s operations throughout Spain. The first one will involve the firm’s new headquarters in Madrid’s financial centre. Savills’ Spanish subsidiary is in the process of transferring its offices to one of the capital city’s principal skyscrapers. After lengthy negotiations, the new consultancy opted for the Castellana 81 building, better known as the BBVA tower. The company will take on 8,000 square meters of space, leasing a total of six floors from the GMP socimi, which owns the asset.

The BBVA tower, built in 1981, is one of the defining features of the Azca financial centre of the Spanish capital. GMP rehabilitated the asset after its purchase and, coincidentally, Aguirre Newman, in addition to CBRE, was one of the firms that led the search for new tenants for the property. The consultancy plans to move to its new offices as soon as the two companies’ merger is formalised.

Original Story: EjePrime – C. Pareja

Translation: Richard Turner

 

UBS Reveals Aena’s Plans for the Future

12 March 2018 – Cinco Días

The major privatisation of recent times – albeit partial, given that the State still owns a 51% stake – has been an undisputed success. The Spanish airport manager Aena made its debut on the Spanish stock market on 11 February 2015 at €58 per share with a market capitalisation of €5.8 billion. Since then, its share price has soared by almost 200% and the firm is now worth more than €25 billion (around €170 per share).

In Spain, the group manages 46 airports and 2 heliports; it also participates in the management of 12 airports in Mexico, two in Colombia and one in Jamaica, and it controls 51% of London’s Luton airport. It is the number 1 airport manager in the world handling more than 265 million passengers in 2017.

But Aena considers that there are opportunities that it must take advantage of and to this end, it is analysing the creation of a new company to undertake its mergers and acquisitions. Aena would control the new company, but it would not be the majority shareholder. That has been revealed by UBS in a report following meetings with the directors of Aena.

An analyst from the Swiss bank Cristian Nedelcu said that “the new company will probably be consolidated in the capital”. “We consider this as something positive, given that it limits the cash flow and commitments from Aena [allocated to those purposes]”, he added.

UBS revealed another one of Aena’s plans for the medium term. The constitution of a “similar company to manage the real estate business, with the incorporation of specialist managers”, which would also limit the resources that the company chaired by Jaime García Legaz (pictured above) would have to allocate to the segment.

Both initiatives open the door to an increase in Aena’s dividend. UBS considers that with the real estate company and the subsidiary to undertake corporate operations, the company would have scope to increase the percentage of profit that it allocates to remunerating shareholders (also known as the ‘payout’).

Whilst €1 billion in free cash flow is equivalent to €6.5 per share, which is what it will pay out of the profits for 2017, it remains to be seen what the company will do with the €1.6 billion that UBS expects it to make in 2021. “The decisions will be known in the coming months”, said the financial institution.

Aena is planning to market 2.7 million m2 of land in Madrid and 1.8 million m2 of land in Barcelona, as revealed at the presentation of its results on 28 February. In Madrid, of the 921 hectares analysed, 526 hectares are developable and 369 are marketable, whilst in Barcelona, of the 328 hectares analysed, 226 are developable and 180 are marketable.

The company recorded revenues from the real estate arm of €61.1 million last year, which represented 1.2% of its total turnover of €4.0 billion. The aeronautical business accounted for 61.5%; the commercial business, 34.7%; and the international business, the remaining 2.6%.

The group earned €1.2 billion last year, 5.8% more than in 2016, with an EBITDA of €2.5 billion, up by 9.8%, and a margin of 62.5%, compared with 60.8% in 2016, “due to the maintenance of the efficiency achieved despite the operational tension resulting from the increase in traffic”, explained the firm.

Original story: Cinco Días (by Pablo M. Simón)

Translation: Carmel Drake